DEPTV 


OOCUMEWR 
DEPT. 


STATE  OFJSIEW  YORK 
EXECUTIVE^  CHAMBER 


REPORT 


OF 


Governor  Smith's  .Reconstruction 
Commission 


on 


A   Permanent   Unemployment 
Program 


JUNE  17,  1919 


ALBANY 

.1.  B.  LYON  COMPANY,  PRINTERS 
1919 


DOCUMENTS 
DEPT. 


REPORT   ON  A  PERMANENT  UNEMPLOYMENT 

PROGRAM 


Herewith  the  Reconstruction  Commission  begs  to  call  to  your 
attention  the  desirability  of  framing,  as  a  part  of  the  State's  recon- 
struction program,  a  permanent  program  for  dealing  with  the  prob- 
lem of  unemployment  in  the  State. 

It  is  unnecessary  for  your  Commission  to  point  out  that  unem- 
ployment is  a  chronic  feature  in  the  industrial  life  of  the  State. 
This  was  clearly  pointed  out  by  the  Wainwright  Commission., 
which  was  appointed  to  inquire  into  the  question  of  employers* 
liability  and  other  matters,  one  of  which  was  unemployment.  In 
the  report  submitted  by  it  to  the  Legislature  of  the  State  that  Com- 
mission declared: 

"  We  find  in  the  industrial  centers  of  this  State,  at  all  times 
of  the  year,  in  good  times  as  well  as  in  bad,  wage-earners  who 
cannot  secure  employment."-  -  Report  to  the  Legislature  of 
the  State  of  ]N~ew  York  —  Employment  and  lack  of  farm, 
labor. —  Page  2. 

Hitherto  the  problem  of  unemployment,  despite  the  insistence  of 
all  investigators  of  the  subject  upon  its  continuous  and  normal 
character,  has  been  prone  to  be  regarded  by  our  government  as  an 
occasional  emergency  requiring,  if  anything,  only  emergency 
measures. 

But  the  time  has  come  for  the  State  to  consider  what  it  may  do 
in  a  permanent  way  to  ameliorate  if  not  to  prevent  this  permanent, 
chronic  ill  of  the  industrial  system. 

The  chronic  unemployment  which  exists  in  the  State,  independ- 
ent of  business  conditions,  is  attributable  in  the  main  to  two 
factors  (1)  the  physical  impossibility,  in  the  present  industrial 
organization,  of  connecting  worker  and  job  without  loss  of  time  in 
the  interim,  and  (2)  the  seasonal  fluctuations  in  the  demand  for 
labor  in  the  several  industries.  In  addition  to  these  continuous 
and  normal  causes  of  unemployment,  we  find  the  variations  in  the 
demand  for  labor  in  one  or  another  industry  due  to  the  incessant. 

9801)66 


play  of  business  conditions.  Finally  there  are  the  cyclical  depres- 
sions of  the  whole  industrial  system  causing  widespread  and  severe 
unemployment,  These  cyclical  depressions  are  due  to  a  number 
of  causes  among  which  are  generally  mentioned  fluctuation  in 
supply  of  gold  and  silver,  misdirection  of  productive  energy,  under 
consumption,  excessive  competition,  etc.  For  each  of  these  factors 
a  remedy  must  be  sought. 

PUBLIC  AND  PRIVATE  EMPLOYMENT  OFFICES 

The  problem  of  reducing  to  a  minimum,  if  not  wholly  elimin- 
ating, the  loss  of  time  which  now  ensues  in  connecting  the  worker 
and  the  job  is  purely  a  problem  of  organization,  of  machinery. 
Were  it  possible  to  establish  a  system  of  labor  exchanges  which 
would  record  in  a  single  unified  register  every  vacancy  and  every 
seeker  for  work,  this  loss  would  be  reduced  to  a  minimum.  It  is 
the  impossibility  of  securing  even  an  approach  to  this  condition 
under  the  system  of  competitive  privately  operated,  fee-charging 
employment  agencies  that  is  responsible  for  the  development  of 
the  public  employment  office.  But  unless  the  system  of  public 
employment  offices  is  established  upon  an  adequate  basis  it  con- 
tributes nothing  substantial  to  a  solution  of  the  problem.  It  merely 
adds  another  office  to  those  already  in  the  field.  There  is  no  more 
assurance  than  before  that  the  man  and  the  job  will  come  together 
with  a  minimum  of  delay.  In  short,  the  system  of  public  employ- 
ment must  be  so  fortified  and  extended  that  it  comes  to  enjoy  a 
substantial  monopoly  of  the  business  of  employment  exchange. 
Only  thus  can  the  basic  purpose  of  the  system  be  realized. 

This  is  not  to  say  that  there  is  not  in  so  complex  an  industrial 
commercial  community  as  this  State  a  legitimate  and  permanent 
place  for  privately  operated  employment  exchanges  of  certain 
types.  There  are  certain  classes  of  employment  involving  highly 
specialized  qualifications,  both  professional  and  personal  in  which 
the  employment  exchange  acts,  in  great  measure,  as  the  trusted 
agent  of  the  employer.  Schools,  colleges  and  business  colleges 
conduct  employment  bureaus  in  the  larger  cities  which  are  of  sub- 
stantial benefit  to  graduates.  In  these  limited  fields,  it  is  ques- 
tionable whetH^T  the  State  exchange  can  ever  displace  the  privately 
operated  exchange,  nor  is  it  at  all  clear  that  it  would  be  desirable 


for  it  to  do  so.  Again,  in  certain  trades  in  which  the  "  closed 
shop  "  prevails,  the  trade  unions  are  the  recognized  employment 
exchanges  of  the  industry.  In  these  cases,  the  trade  union  fur- 
nishes a  wholly  efficient  employment  exchange  within  the  field  and 
there  is  no  reason  why  it  should  be  superseded  by  the  public 
employment  exchanges. 

For  the  great  run  of  employments,  however,  the  ideal  condition 
will  be  attained  only  when  the  State  system  of  exchange  becomes 
in  effect  the  exclusive  source  of  supply  for  labor.  To  that  end  the 
permanent  legislative  policy  of  the  State  should  be  carefully 
directed. 

The  British  government  in  1911  attacked  the  problem  with 
characteristic  thoroughness.  Prior  to  that  time  there  were  only 
a  few  small  exchanges  operated  under  the  "  Unemployed  Workmen 
Act  of  1905."  Having  decided  to  enter  upon  the  establishment  of 
such  offices,  the  government  proceeded  so  rapidly  that  within  a 
short  time  there  had  been  established  so  many  offices  that  it  has 
been  said  that  no  worker  in  the  United  Kingdom  is  more  than  a 
short  distance  from  an  office.* 

Utterly  different  has  been  the  policy  of  this  State.  The  public 
employment  office  system  of  the  State  was  established  by  an  act 
of  1914  and  began  operations  in  1915.  At  the  end  of  1917  it  was 
virtually  taken  over  by  the  U.  S.  Employment  Service  created  by 
the  National  government  to  meet  the  war  emergency.  It  may  thus 
be  said  to  have  had  an  existence  of  three  years  under  normal  con- 
ditions. Its  appropriations  have  four  times  been  passed  on  by  the 
Legislature.  In  the  City  of  New  York  there  has  been  maintained 
but  one  real  office  —  in  the  Borough  of  Brooklyn  —  obviously 
wholly  useless  as  a  solution  of  the  situation,  and  serving  the  sole 
purpose  of  furnishing  without  charge,  to  a  limited  number  of  citi- 
zens who  happen  to  be  in  a  position  to  use  it,  a  service  performed 
equally  well  for  a  fee,  by  numerous  private  agencies.  In  its  four 
up-State  offices  the  service  has  doubtless  approached  much  nearer 
the  ideal  of  a  central,  monopolistic  exchange,  but  even  here  it  has 
been  organized  on  a  scale  by  no  means  adequate. 


*  The  decision  to  make  these  offices  the  agencies  of  the  unemployment  insur- 
ance system  inaugurated  at  the  same  time  was  of  course  partly  responsible 
for  the  thoroughness  with  which  the  country  was  organized. 


6 

On  March  21st  last  this  Commission  submitted  to  you  a  report,, 
recommending  that  you  urge  upon  the  Legislature  the  allowance  of 
an  additional  appropriation  for  the  State  employment  service  for 
the  ensuing  fiscal  year  sufficient  to  bring  the  total  annual  appro- 
priation by  the  State  to  about  $400,000  with  a  provision  for  the 
acceptance  by  the  State  of  a  federal  subsidy  if  the  next  Congress 
should  make  such  a  subsidy  available.  An  additional  appropria- 
tion on  substantially  this  basis  was  made  by  the  Legislature.  The 
amount  now  available  will  in  the  judgment  of  your  Commission 
enable  the  State  Industrial  Commission  to  place  the  service  for  the 
first  time  upon  a  basis  in  some  degree  commensurate  with  the  size 
of  the  problem  to  be  solved.  But  even  this  amount  will  be  insuffi- 
cient unless  the  State  with  or  without  federal  aid  stands  ready  still 
further  to  enlarge  the  service,  as  its  development  warrants,  until 
it  becomes  in  effect  substantially  the  sole  employment  exchange  of 
the  State. 

The  Commission  recognizes,  however,  that  the  time  is  perhaps 
distant  when  the  State  system  will  reach  a  point  of  efficiency  suf- 
ficient to  warrant  its  completely  superseding  all  the  privately  op- 
erated employment  agencies  excepting  those  of  a  professional  and 
personal  character  mentioned  above.  !N"or  when  that  time  is 
reached,  will  it  be  necessary  to  enact  legislation  to  terminate  the 
activities  of  these  private  agencies.  The  competition  of  the  free 
public  agencies  will  of  itself  make  impossible  the  continuance  of 
most  of  the  competitive  privately  operated,  fee-charging  agencies. 

Until  that  time  comes,  however,  the  operation  of  the  private 
employment  agencies  should  receive  a  far  more  vigorous  super- 
vision on  the  part  of  the  State  than  now  obtains.  Under  existing 
laws*  an  employment  agency  is  not  required  to  obtain  a  State 
license,  but  cities  of  the  first  and  second  classes  are  permitted  to 
require  a  license  and  to  impose  a  fee  of  not  more  than  $25  in  con- 
nection therewith.  Of  ten  cities  in  the  first  and  second  classes, 
all  except  Troy  and  Binghamton  have  exercised  the  power  thus 
vested  in  them.  Even  in  these  cities  an  employment  agent,  par- 
ticularly one  engaged  in  supplying  common  labor,  who  above  all 
others  requires  close  supervision  by  public  officers  —  has  but  to 
establish  himself  in  headquarters  just  outside  of  the  city  limits  in 


*  General  Business  Law,  Section  170. 


order  to  escape  completely  the  operation  of  the  local  ordinance.  In 
the  smaller  towns  and  cities  of  the  State  all  classes  of  employment 
agents  are  wholly  without  governmental  supervision.  Your  Com- 
mission is  strongly  in  favor  of  the  view,  taken  by  the  Industrial 
Commission  of  the  State,  that  all  employment  agencies  in  the  State, 
regardless  of  their  location,  should  be  licensed,  and  should  be 
required  to  sign  a  penal  bond,  the  license  to  be  for  a  short  period 
of  time  and  to  embody  provision  for  the  revocation  or  non-renewal 
of  the  license  in  the  event  of  improper  conduct  on  the  part  of  the 
licensee. 

Your  Commission  understands  that  the  Industrial  Commission 
drew  up  proposals  for  a  bill  to  be  introduced  in  the  last  Legis- 
lature* requiring  all  employment  agencies  in  the  State  to  be 
licensed  by  the  Industrial  Commission,  and  to  pay  a  fee  of  $250. 
Your  Commission  is  disposed  to  doubt  whether  anything  is  to  be 
gained  by  disturbing  the  efficient  system  of  licensing  and  regula- 
tion of  employment  agencies  which  has  been  built  up  under 
existing  law  by  the  municipal  authorities  in  the  cities  of  New 
York  and  Buffalo  respectively.  It  seems  to  us  that  the  pro- 
posed bill  should  be  modified  so  as  to  provide  that  first  class 
cities  shall  collect  the  license  fees,  returning  half  the  fees  to 
the  State.  With  this  reservation,  they  are  heartily  in  ac- 
cord with  the  proposal  of  the  Industrial  Commission.  There 
should  also  be  a  provision  that  in  all  first  and  second  class  cities 
information  and  reports  on  standard  forms  should  be  submitted 
by  the  local  licensing  authority  to  the  State  Industrial  Commis- 
sion. 

As  there  are  672  private  employment  agencies  in  New  York 
city  and  71  licensed  agencies  up-State  and  a  considerable  number 
of  unlicensed  agencies,  the  returns  in  revenue  to  the  State  and  the 
localities  will  be  considerable.  Believing  that  the  interests  of  the 
working  population  and  of  the  business  community  are  promoted 
by  a  reduction  in  the  number  of  small,  inefficient  and  temporary 
agencies,  your  Commission  wishes  to  record  its  approval  of  this 
proposed  increase  in  the  amount  of  the  fee  as  a  measure  that  will 


*  In  addition  a  bill  (see  Assembly  Bill  412)  was  introduced  by  Mr.  Youker, 
January  31,  1919,  providing  that  in  all  cities  of  the  first  and  second  class 
employment  agencies  shall  pay  a  fee  of  $250  to  the  Mayor  or  Commissioner 
of  Licenses.  This  applies  only  to  cities  of  the  first  and  second  class. 


8 

tend  to  discourage  the  multiplication  of  needless  employment 
offices  of  inadequate  financial  and  business  stability. 

The  present  State  law  provides  for  the  maintenance  of  a  stand- 
ard type  of  register  by  the  private  employment  agencies,  and  for 
the  submission  of  figures  from  this  register  to  the  Bureau  of 
Employment  of  the  State  Industrial  Commission.  At  the  present 
time  the  supervision  of  these  registers  is  not  vigorously  exercised. 
It  must  however  be  borne  in  mind  that  it  is  very  difficult  to  obtain 
accurate  figures  from  private  employment  agencies.  Notwith- 
standing this  difficulty,  the  State  Industrial  Commission  could 
make  considerable  progress  by  testing  the  figures  submitted  by 
several  agencies  and  making  an  example  of  such  agencies  as  make 
false  returns.  It  would  also  be  desirable  to  strengthen  the  present 
law  so  as  to  provide  that  the  books  of  private  exchanges  should  be 
open  to  audit  by  the  State  Industrial  Commission  as  well  as  by 
first  and  second  class  cities. 

In  connection  with  the  development  of  the  State  employment 
service  and  the  control  and  gradual  supplanting  of  most  of  the  pri- 
vate employment  agencies  there  are  a  number  of  important  prob- 
lems, which  the  Industrial  Commission  through  the  Bureau  of 
Employment  -should  study  with  a  view  to  development  of  a  definite 
program.  The  following  subjects  are  among  the  most  important 
which  should  be  studied: 

1.  The  organization  of  the  labor  market  to  bring  about  exten- 
sive dovetailing  of  winter  and  summer  trades  and  to  stimulate  the 
use  of  subsidiary  trades. 

2.  Directing  labor  to  new  occupations  when  changes  of  indus- 
trial structure  result  in  displacement  from  chosen  occupations. 

3.  Reserving  certain   places   in   industry   for  older   men    and 
women  and  leaving  the  younger  generation  the  task  of  finding  and 
forcing  fresh  openings  for  themselves. 

4.  Concentrating  attention  upon  the  need  for  industrial  train- 
ing, including  "  vestibule  "  or  preliminary  training,  training  in 
plants  to  increase  efficiency  while  gainfully  employed,  and  train- 
ing in  trade  and  business  schools.     This  should  be  done  with  the 
State  and  local  departments  of  education  and  with  private  edu- 
cational institutions.      An  annual  bulletin  should  be  published, 
similar  to  that  published  by  the  Clearing  House  for  War  Time 


Training  for  Women,  describing  the  courses  of  training  in  schools, 
trade  schools,  colleges,  etc.,  for  those  seeking  a  vocational  education. 

5.  Directing  boys  and  girls  away  from  "  blind  alley  "  employ- 
ment, and  issuing  monthly  bulletins  based  on  the  most  complete 
figures  which  can  be  obtained. 

6.  Testing   periodically    and    comprehensively   the   amount   of 
unemployment. 

7.  In    cases    of    seasonal    employment    or    depression,    urging 
employers  to  shorten  hours  rather  than  discharge  employees. 

REGULATION  OF  INDUSTRY 

Much  of  the  seasonal  employment  which  is  characteristic  of  so 
many  industries  —  notably  the  garment  industry  —  could  doubt- 
less be  eliminated  by  a  more  rational  organization  of  the  market 
and  of  the  relations  between  manufacturer  and  distributors.  This 
problem  should  be  carefully  studied  especially  by  the  Bureau  of 
Employment  of  the  State  Industrial  Commission  in  conjunction 
with  the  industries  wherever  possible. 

Similarly,  it  has  been  urged,  with  apparent  truth,  that  even  the 
cyclical  depressions  to  which  the  economic  order  is  subject  could 
be  in  a  large  measure  prevented  or  at  least  ameliorated  by  edu- 
cating the  public  and  the  business  community  to  continue  in  the 
face  of  threatening  depression  to  spend  on  the  usual  scale,  and 
indeed  to  advance  purchases  at  such  times.  Suggestions  have  been 
made  for  other  forms  of  action  by  producers  having  the  same  end 
in  view.* 

Your  Commission  has  not  deemed  it  worth  while  to  inquire  with 
any  thoroughness  into  suggestions  of  this  character  for  the  reason 
that,  assuming  their  value,  they  can  be  made  effective  only  if 
applied  on  a  national,  if  not  an  international  scale.  Action  in  this 
field,  if  it  is  to  be  undertaken  at  all,  is  peculiarly  the  province  of 
the  national  government  and  of  the  national  organizations  of  indus- 
try, labor  and  commerce.  It  is  not  a  matter  in  which  action  by  the 
State  would  be  appropriate  or  useful. 


*  See  especially  "  How  to  Meet  Hard  Times,"  a  "  Program  for  the  Preven- 
tion and  "Relief  of  Abnormal  Unemployment,"  issued  by  the  Mayor's  Committee 
on  Unemployment.  Xo\v  York  City,  January  1917. 


10 

CONTEOL  OF  PUBLIC  WOKKS  CONSTRUCTION 

The  periodic  depressions  to  which  the  industrial  order  is  subject 
are  of  course  attributable  to  underlying  economic  forces  which  lie 
wholly  outside  the  control  of  the  State.  It  is  to  be  questioned 
whether  even  the  sphere  of  influence  of  the  national  government  is 
sufficiently  broad  to  enable  it  to  cope  with  these  forces;  but  that 
they  are  beyond  the  power  of  the  State  is  unquestionable. 

For  some  years  however  the  suggestion  has  been  urged  that  in 
the  control  over  public  works  the  State  and  its  local  subdivisions 
possessed  a  potential  economic  power  which  they  might  employ 
measurably  to  ameliorate  the  severity  of  these  periodic  industrial 
depressions.  It  has  been  urged  that  many  of  the  public  works  pro- 
jects of  the  states,  counties  and  municipalities,  as  well  as  of  the 
national  government  and  of  the  great  public  utilities  such  as  the 
railroads,  are  not  of  a  character  imperatively  requiring  their  exe- 
cution at 'a  given  time,  as  they  are  not  produced  to  meet  a  market 
demand.  If  projected  on  a  long-term  basis,  it  would  be  possible  to 
defer  the  execution  of  a  portion  of  the  annual  program  of  such 
projects  from  year  to  year,  a  corresponding  reserve  fund  being  set 
up.  Thus,  when  a  period  of  general  industrial  depression  menaced 
it  would  be  possible  for  the  national,  State  and  local  governments 
and  the  railroads  to  forthwith,  with  funds  and  plans  already  avail- 
able, proceed  to  the  execution  of  the  defense  program.  Such  a  pro- 
cedure, if  extensively  followed,  would,  it  has  been  urged,  greatly 
reduce  the  extent  of  the  unemployment  which  a  depression  would 
normally  involve,  not  merely  by  directly  giving  employment  to  a 
considerable  number  of  men,  but  by  steadying  the  market  for  con- 
sumption of  goods.  The  buying  power  of  the  men  given  employ- 
ment would  exert  a  most  wholesome  effect  on  a  market  suffering  as 
it  always  suffers  in  times  of  depression  from  lack  of  confidence  in 
the  future. 

It  has  been  pointed  out  that  this  plan  involves  in  effect  a  reversal 
of  the  practice  now  commonly  followed  by  public  officials  and  rail- 
roads, of  discontinuing  improvements  in  times  of  depression.  For 
this  practice  there  exists  however  no  justification  in  reason  or 
experience.  On  the  contrary  it  is  certain  that  the  plan  would  be 
of  financial  advantage  to  the  governmental  bodies  and  the  rail- 
roads though  this  is  not  its  purpose,  for  it  would  of  course  enable 


11 

them  to  buy  materials  and  perhaps  labor  at  lesser  prices  than  in 
times  of  industrial  activity. 

Your  Commission  is  of  the  opinion  that  there  is  little  if  any 
improvement  contemplated  by  the  railroads  and  other  large  public 
utilities  which  can  be  deferred  without  serious  detriment  or  danger. 

It  has  been  questioned  whether  this  plan,  even  if  admitted  to  be 
practicable  so  far  as  government  agencies  are  concerned  would  be 
effective  —  whether  the  amount  of  public  works  construction  which 
could  be  deferred  in  this  way  is  sufficiently  great  to  have  any  influ- 
ence on  the  general  economic  situation.  Only  a  long-term  test 
could  furnish  a  reliable  answer  to  this  question.  Mr.  John  R. 
Shillady,  who  investigated  the  subject  for  the  Mayor's  Committee 
on  Unemployment  created  during  the  crisis  of  1914,  has  made  per- 
haps the  most  careful  detailed  examination  of  this  subject.  His 
conclusion  was  that  "If  an  employment  reserve  approximating  10 
per  cent,  on  the  average,  of  the  '  outlay '  of  federal,  State,  county 
and  municipal  governments  on  the  acquisition  and  construction  of 
permanent  properties  and  public  improvements,  added  to  a  like 
one-tenth  of  the  annual  railroad  expenditures  for  roads  and  per- 
manent equipment,  be  erected  by  means  of  such  a  deferred  improve- 
ments program  as  has  been  suggested  there  will  result,  on  the  most 
conservative  estimate,  a  fund  for  use  during  the  tenth  year  suffi- 
cient to  employ  at  least  one-tenth  of  the  working  population  of  the 
country  engaged  in  trade,  transportation  and  manufacturing  and 
mechanical  pursuits,  for  a  period  of  twelve  weeks,  at  an  average 
weekly  wage,  for  all  ages  and  kinds  of  labor,  of  $12  for  males  and 
$7  for  females."  Pie  believed  that  this  potential  reserve  was  suffi- 
ciently large  to  exert  a  most  beneficial  influence  upon  the  employ- 
ment situation.  His  average  weekly  wage  would  of  course  be  far 
from  a  living  wage  under  present  conditions. 

Whatever  may  be  the  actual  importance  of  the  influence  which 
the  general  adoption  of  this  plan  in  this  country  would  exert,  it 
seems  clear  that,  if  it  would  have  any  beneficial  influence  what- 
ever it  is  the  duty  of  the  State  to  apply  it  within  the  limited  field 
over  which  it  has  control,  and  to  urge  and  assist  the  cities  and 
counties  of  the  State  to  do  likewise,  unless  there  exist  administra- 
tive reasons  which  render  its  execution  impracticable. 

It  must  be  admitted  that  despite  the  advocacy  of  the  suggestion 
muler  discussion  for  some  years  past,  there  is  but  little  precedent, 


12 

either  in  this  country  or  abroad,  for  concrete  action  by  which  it 
may  be  put  in  effect.  The  British  Development  Commission, 
which  recommends  to  the  treasury  allowances  of  funds  (by  grant 
or  loan)  to  government  departments  or  local  authorities  for  the 
development  of  agricultural  and  other  rural  industries,  including 
roads,  has  followed  the  plan  of  designating  some  of  the  projects 
approved  by  it  for  execution  only  if  "  distress  arising  from  lack 
of  employment,  should  occur/7  and  has  set  aside  a  very  consider- 
able portion  of  the  funds  under  its  control  to  be  used  only  for 
grants  for  projects  of  this  class. 

It  is  said  that  in  Germany  certain  of  the  cities  have  followed 
the  practice  of  setting  up  financial  reserves  for  the  accumulation 
of  improvement  funds  and  that  recently  such  reserves,  originally 
merely  a  fiscal  expedient,  for  making  possible  the  construction  of 
costly  works,  have  demonstrated  their  value  in  facilitating  the 
rapid  execution  of  such  works  in  times  of  unemployment. 

The  experience  in  foreign  countries  in  providing  public  works 
merely  for  purposes  of  charity  is  of  no  value  in  the  consideration 
of  a  logical  deferred  public  works  program. 

In  this  country,  the  only  action  thus  far  taken  is  that  embodied 
in  the  Pennsylvania  law  of  1917,  providing  for  the  creation  of  a 
State  Board  of  Public  Works,  and  making  a  small  appropriation 
therefor  ($40,000)  ;  said  board  being  empowered  upon  the  cer- 
tification by  the  Industrial  Commission  of  a  state  of  unemploy- 
ment, immediately  to  allot  the  funds  at  its  disposal  to  the  several 
departments  of  the  State  having  public  works  projects  ready  for 
execution  but  no  funds  available  therefor.  In  effect  this  plan  is 
the  German  one  of  accumulating  a  reserve  fund  to  be  immediately 
available  when  the  emergency  arises;  but  the  wholly  inadequate 
size  of  the  initial  appropriation  is  strongly  suggestive  of  the 
extreme  difficulty  which  should  be  encountered  in  attempting  to 
build  up  reserves  of  this  kind  in  the  present  condition  of  the 
finances  of  most  of  our  states. 

Turning  now  specifically  to  the  conditions  in  our  own  State,  we 
find  that  there  have  been  unusually  largo  expenditures  for  public 
works,  including  public  buildings,  during  the  past  years  by  the 
State,  the  counties  and  the  cities.  How  much  of  this  expenditure 
could  have  been  deferred  for  a  period  of  years,  against  such  an 
emergency  as  threatened  the  State  during  the  months  following 


13 

the  termination  of  hostilities  is  a  question  of  the  greatest  difficulty. 
In  some  of  the  branches  of  public  work,  as  for  example  in  the  con- 
struction of  school  buildings  in  the  City  of  Xew  York,  it  is 
notorious  that  construction  has  lagged  far  in  the  rear  of  actual 
need,  so  that  no  deferment,  for  however  good  a  cause,  could  have 
been  made.  Again,  in  the  case  of  the  Barge  Canal,  we  have  an  enor- 
mous public  work  most  of  which  could  not  be  put  to  any  substan- 
tial use  until  the  whole  of  it  has  been  completed.  Obviously  defer- 
ment here  could  economically  have  been  employed  only  within 
very  narrow  limitations.  On  the  other  hand,  much  of  the  State 
road  work,  some  of  the  city  work,  and  doubtless  even  much  of  the 
county  work,  could  readily  have  been  deferred  for  a  period  of 
years. 

Without  attempting  any  estimate  of  the  amount  of  expenditure 
which  could  be  deferred  and  accumulated  —  an  attempt  which 
could  produce  only  the  merest  guess  —  it  seems  clear  to  your  Com- 
mission that,  in  the  absence  of  parallel  action  by  the  national  gov- 
ernment and  the  railroads,  the  influence  which  could  be  exterted  by 
the  State  and  its  local  subdivisions  would  be  a  minor  one.  Still 
more  minor  would  be  the  effect  produced  if,  as  seems  necessary, 
the  action  of  the  State  were  confined  to  works  executed  by  the 
State  itself.  It  is  difficult  to  see  how  the  State  could  effectively 
compel  the  action  of  the  local  authorities  in  this  respect  except 
perhaps  as  to  works  financed  jointly  by  the  State  and  the  locality. 

In  view  of  the  minor  effect  which  action  by  the  State  could  thus 
at  best  produce,  your  Commission  has  not  felt  justified  in  recom- 
mending recourse  to  any  new  and  untried  methods  of  public  works 
administration  and  finance.  For  the  present  it  would  seem  that 
the  most  that  can  practically  be  done  is  to  impress  upon  the  vari- 
ous State  departments  and  the  local  authorities  the  desirability  of 
planning  public  improvements  upon  a  long-term  basis,  and  to 
designate  some  authority  in  the  State  to  keep  currently  in  touch 
with  the  execution  of  the  several  local  and  State  programs,  with  a 
view  to  urging  upon  the  city,  county  and  State  authorities,  and 
where  necessary  upon  the  State  Legislature,  prompt  action  in 
pushing  forward  the  work  outlined  with  especial  vigor  whenever 
industrial  depression  threatens.  In  addition  the  work  of  the  War 
Department  on  employment  of  soldiers  has  clearly  demonstrated 
the  possibilities  in  guiding  the  unemployed  to  work,  and  providing 


14 

men  for  contractors  through  the  careful  analysis  of  public  works 
contracts  and  close  co-operation  with  the  authorities  responsible  for 
letting  contracts.  We  are  of  the  opinion  that  an  annual  confer- 
ence of  all  public  works  authorities  in  the  State  would  be  of  great 
benefit  not  only  for  this  purpose  but  also  for  the  purposes  of 
co-operation  in  the  purely  engineering  and  contracting  problems 
of  the  several  administrations.  In  its  investigation  of  the  status  of 
existing  public  works  projects  throughout  the  State,  your  Com- 
mission has  been  impressed  with  the  absence  of  concrete  and  exact 
information  on  this  subject  upon  which  any  official  policy  might 
be  formulated,  and  with  the  absence  of  any  central  official  au- 
thority which  might,  upon  such  information,  attempt,  if  only  by 
exhortation,  to  enlist  the  co-operation  of  the  several  local  and 
State  authorities  in  carrying  out  any  policy  that  might  seem 
expedient  in  view  of  the  current  business  and  employment  situa- 
tion. Your  Commission  believes  that  had  such  a  body  been  in 
existence  prior  to  the  cessation  of  hostilities  it  might  have  done 
a  very  great  service  in  procuring  the  initiative  or  resumption  of 
construction  on  a  number  of  projects  some  months  earlier  than 
has  actually  been  the  case.  With  this  experience  in  mind  your 
Commission  recommends  that  (1)  In  the  absence  of  a  single  recog- 
nized State  Public  Works  Director  the  Legislature  authorize 
and  require  the  State  Industrial  Commission  through  the 
Bureau  of  Employment  to  obtain  during  the  first  three  months 
of  each  year  from  the  several  State  departments  and  locali- 
ties information  regarding  all  public  works  projected  and 
under  construction,  and  to  publish  this  information  annually 
in  April,  in  a  summary  form  similar  to  that  adopted  this  year  by 
the  Reconstruction  Commission  in  its  report  to  you  on  public 
improvements.  (2)  An  informal  body  be  set  up  consisting  of 
representatives  of  the  State  departments  principally  concerned 
with  public  works  including  the  State  Engineer,  Superintendent 
of  Public  Works,  Commissioner  of  Highways,  State  Architect  and 
Conservation  Commissioner,  and  of  representatives  of  the  State 
Industrial  Commission,  which  shall  study  the  data  thus  obtained 
in  conjunction  with  the  data  regarding  employment  and  business 
conditions  currently  gathered  by  the  State  Industrial  Commission 
and  shall  call  in  April  or  May  an  annual  conference  of  all  public 
works  authorities  throughout  the  State  to  discuss  engineering. 


15 

financial,  employment  and  other  common  problems  and  to  endeavor 
by  counsel  and  suggestion  to  effect  the  vigorous  prosecution  of  all 
works  already  planned  for  and  financed,  and  the  prompt  financing 
of  works  projected  whenever  severe  business  depression  and  unem- 
ployment threaten.  At  this  conference  arrangements  should  be 
made  by  the  representatives  of  the  Bureau  of  Employment  with 
the  various  public  works  authorities,  whereby  the  Bureau  could  be 
instrumental  in  supplying  men  to  officials  and  contractors  when 
work  actually  commences.  Were  such  a  board  instituted,  its  opera- 
tions over  a  period  of  a  few  years  would  disclose,  more  effectively 
than  any  speculation  which  may  now  be  advanced  by  your  Commis- 
sion, precisely  what  if  anything  may  be  accomplished  by  more  posi- 
tive and  compulsory  action  of  the  State  in  securing  an  actual 
deferment  of  public  works  construction  against  periods  of 
depression. 

UNEMPLOYMENT  INSURANCE 

Even  were  all  the  measures  suggested  and  referred  to  in  the 
foregoing  taken  and  vigorously  prosecuted  not  only  by  the  State 
but  by  the  nation  as  well,  there  would  still  persist,  as  a  chronic 
feature  of  the  industrial  system,  a  certain  amount  of  unemploy- 
ment. The  industrial  mechanism  is  too  complicated  to  be  entirely 
within  the  reach  of  such  measures.  Against  the  unavoidable  idle- 
ness, which  is  impossible  of  elimination,  unemployment  insur- 
ance has  been  the  remedy  resorted  to  in  other  countries. 

But  were  any  plan  of  unemployment  insurance  to  be  put  into 
effect  in  the  near  future  in  this  State,  before  the  policies  outlined 
can  have  been  developed  and  matured,  or  before  any  consistent  and 
widespread  attempt  is  made  to  develop  them,  the  insurance  prob- 
lem presented  becomes  of  far  greater  magnitude  and  difficulty. 

Before  unemployment  insurance  can  be  put  into  effect,  the  State 
employment  service  must  be  greatly  extended,  must  be  practically  a 
monopoly  and  must  be  so  efficient  as  to  be  capable  of  administering 
a  law  which  involves  complete  supervision  of  all  employment 
throughout  the  State. 

In  view  of  these  considerations,  this  Commission  does  not 
recommend  any  immediate  action  by  the  State  looking  toward 
unemployment  insurance.  We  are  of  the  opinion  that  the  adop- 


16 

tion  of  our  other  recommendations  will  lead  in  a  short  time  to  the 
accumulation  of  experience  which  will  clearly  demonstrate  whether 
or  not  unemployment  insurance  is  the  next  logical  step. 

SUMMARY  OF  RECOMMENDATIONS  TO  THE  GOVERNOR 

1.  Continue  to  develop  the  State  employment  service  looking 
toward  an  ultimate  State  monopoly  in  this  field,  excepting  possibly 
a  small  number  of  Union  agencies  and  private  agencies  supplying 
service  of  a  personal  and  professional  character. 

2.  Revise  and  introduce  the  bill  drawn  up  by  the  Industrial 
Commission  providing  for  licensing  at  a  fee  of  $250  of  all  private 
employment  agencies.     The  State  Industrial  Commission  should 
license  all  agencies  excepting  those  in  first  class  cities.     In  such 
cities  the  licensing  should  be  done  locally,  but  the  State  should 
divide  all  fees  equally  with  the  cities.     The  State's  fees  should  go 
into  a  fund  for  the  support  of  the  Bureau  of  Employment. 

3.  Enforce  the  present  State  law  providing  for  the  maintenance 
of  standard  registers  and  the  submission  of  figures  by  private 
employment  agencies,  extend  the  supervision  of  private  employ- 
ment agencies,  and  draw  up  legislation  opening  the  books  of  pri- 
vate exchanges  to  audit  by  the  State  Bureau  of  Employment. 

4.  Direct  the  Industrial  Commissioner,  through  the  Bureau  of 
Employment,  to  develop  a  program  which  should  cover  the  follow- 
ing subjects : 

(a)  The  organization  of  the  labor  market  to  bring  about 
extensive  dovetailing  of  winter  and  summer  trades  and  to 
stimulate  the  use  of  subsidiary  trades. 

(&)  Directing  labor  to  new  occupations  when  changes  of 
industrial  structure  result  in  displacement  from  chosen 
occupations. 

(c)  Reserving  certain  places  in  industry  for  older  men  and 
women,  and  leaving  the  younger  generation  the  task  of  finding 
and  forcing  fresh  openings  for  themselves. 

(d)  Concentrating  attention  upon  the  need  for  industrial 
training,  including  "  vestibule  "  training  where  such  training 
does  not  lead  to  blind  alley  employment,  training  in  plants  to 
increase  efficiency  while  gainfully  employed,  and  training  in 
trade  and  business  schools.     Issue  in  co-operation  with  the 
State  and  city  departments  of  education  annual  bulletins  out- 


.   17 

lining  the  courses  of  training  in  schools  for  all  schools,  col- 
leges, etc.,  open  to  persons  seeking  vocational  education. 

(e)  Directing  boys  and  girls  away  from  "  blind  alley " 
employment. 

(/)  Testing  periodically  and  comprehensively  the  amount 
of  unemployment  and  publishing  bulletins  based  on  the  most 
complete  figures  which  can  be  obtained. 

(g)  In  cases  of  seasonal  employment  or  depression,  urging 
employers  to  shorten  hours  rather  than  discharge  employees. 

5.  Authorize    and    require   the    State    Industrial    Commission 
through  the  Bureau  of  Employment  to  obtain  during  the  first  three 
months  of  each  year  from  the  several  State  departments  and  locali- 
ties current  information  regarding  all  public  works  projected  and 
under  construction  and  to  publish  this  information  annually  in 
April  in  summary  form. 

6.  Appoint  an  informal  committee  composed  of  representatives 
of    the    State    departments    principally    concerned    with    public 
improvements  and  of  the  State  Industrial  Commission  to  study 
data  thus  obtained  in  conjunction  with  data  regarding  employ- 
ment   and   business   conditions   currently  gathered  by  the   State 
Industrial  Commission,  and  to  call  in  April  or  May  an  annual 
conference  of  all  public  works  authorities  throughout  the  State  to 
discuss  engineering,  financial  employment  and  other  common  prob- 
lems.     This   committee   should   vigorously   prosecute  all  'public 
improvements  whenever  business  depression  and  unemployment 
threaten,  and  report  upon  the  need,  if  any,  of  compulsory  action 
to  secure  the  deferment  of  public  works  and  the  establishment  of 
public  works  reserves. 

ABRAM  I.  ELKUS, 

Chairman  Reconstruction  Commission. 
JOTTN  G.  ARAR, 

Chairman  Committee  on  Unemployment. 
CHARLES  P.  RTETNMETZ, 
MRS.  WALTER  W.  STEELE, 
!N"oRMAN  E.  MACK, 
SARA  A.  CONBOY, 
PETER  J.  BRADY, 
MICHAEL  FRIEDSAM, 

Committee  on  Unemployment. 


RETURN     Governi 

TO—*-     350Mair|Lil 


Documents  Department 

irary  642-2569 


LOAN  PERIOD  1 

————^—  —-__«_____ 

4 

AJ  — 

3 

ALL  BOOKS  MAY  BE  RECALLED  AFTER  7  DAYS 


DUE  AS  STAMPED  BELOW 


MAR  o     1982 

7 

Y                           Ul 

o           o 

^  1   b 

«.£       CD         < 
•  -n 

~           IL, 
j          (jj          Q 

LU                   > 

nnrS  DKT. 

y  I98Z 

UNIVERSITY  OF  CALIFORNIA,  BERKELEY 
FORM  NO.  DD7,  5m,  1  1  778  BERKELEY  CA  94720 


Gaylord  Bros.,  Inc. 

Stockton,  Calif. 
r.  M.  Reg.  U.S.Pat.  Off. 


989966 


AS 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


